Wheels Falling Off Your Product? The Growth Stage of the Product Lifecycle (Product Lifecycle Part 3)

This is part 3 of our five part series exploring the product lifecycle, where we delve into the growth stage. If you haven’t yet, check out part 2 of the series for tips for managing a product introduction and launch.

The growth stage of the product lifecycle starts when you have achieved ‘product market fit‘. This is somewhat of an elusive term. According to Reid Hoffman, the process finding product market fit is an art rather than a science. It is usually characterised by exponential growth in your product value metric for a sustained period of time – usually a few months. Growth is an exciting time for a product after the scrappy struggle of introduction, but it will reveal significant pain points in the process, technology and features that have gotten you to this point that can cripple a growing product if not addressed. Below we discuss some considerations for the growth stage.

Growth Means Nailing Your Value Proposition & Positioning

Achieving growth means that your product value proposition has resonated strongly enough with a sustainably large audience. Exponential growth needs to be achieved over a long enough period for the product to be characterised in the growth phase. It is not sufficient to ‘go viral’ for one day. The most surefire way to achieve growth is to know your target market better than anyone else and deliver a truly powerful, competitive and differentiated value proposition.

Testing your value proposition happens during introduction, but you will still be evolving and adding to it during growth. The value proposition consists of:

• Who your product serves (specific target customer)
• What problem it solves and what benefits a customer gets from solving these
• How it solves it e.g., what features it has that address the problem and achieve the benefits

But it is not sufficient to have a strong value proposition without strong positioning to support it. Positioning will additionally compare your product to a relevant competing alternative e.g. Slack positioned against email. You will then consider:

• How do you do it differently from them, and
• Why that is better for the customer

By building a strong value proposition and positioning, you can confidently market your product to the right audience to sustain growth. You will also be able to identify closely related customer markets that you can expand into. For example, Airbnb started with a value proposition for renting out spare rooms in a host’s house for extra cash but moved quickly to add a value proposition for hosts who wanted to rent out whole properties for the short term and eventually the long term.

By nailing and expanding your value proposition and keeping your positioning up to date as new competitors enter the market, it is possible to maximise the length of the growth stage. By ignoring them and getting too comfortable in your product’s position in the market you risk getting outcompeted or disrupted. This is the number one reason the growth stage ends.

Outpacing The Competition

The number one focus of products in the growth stage must remain in leading the market to maintain and gain market share as fast as possible. This means investments in:

1. Understanding customers better than anyone else. The type of customers a product attracts in growth – early and late majority – are fundamentally different to customers in the introduction stage – early adopters and innovators. These customers will not as easily disregard issues with quality or reliability and will need to see the benefits of your product much more clearly. Keeping your finger on the pulse of your target customers and closely related customer segments is essential.
2. Moving faster than anyone else. It is not enough to understand customers if you don’t do anything about their concerns or if you wait too long. A slow speed to market can kill the growth of a product if a competitor gets there first, even if you eventually release the same features. This is why the scaling of process, operations and technology is so essential to a product’s growth. In introduction it is okay – a benefit even – to hold things together with sticky tape and bandages, but in growth, these same workarounds can end up killing your speed to market.
3. Innovating better than anyone else. Moving faster than anyone else on clearly stated customer needs is one thing, but innovating to continue to outpace the competition in areas they would not consider is the way to secure growth in the long term. Innovation must speak to a longer term strategy for growth that will secure a broader market while retaining your current market (i.e., market share growth). It is not sufficient to implement cool technologies ‘just because’. One example of innovation in search of strategy was the implementation of cryptocurrency payment methods in some food retail settings (e.g., Starbucks). This was innovative technology, but failed to secure a longer term expansion in the market for those products because it failed to capture a new market of customers that wanted to buy the core products they were selling.

Scaling Where It Hurts Most

By far, one of the most common reasons for products to exit growth is that they struggle to maintain their speed to market as their customer base and employee numbers grow. That is, they fail to scale. Scale can happen in many areas of the product and surrounding business areas, in fact it can feel like everything is falling apart under the strain of growth all at once. But trying to scale everything at once is a surefire way to ensure nothing gets done. You may even lose touch with customers and innovation if too much overemphasis is given to scaling.

The most important question you can ask when considering scaling initiatives in the growth stage is where does it hurt most? Do you need to scale:

1. Manual processes: During introduction, it makes sense to do a lot of things manually rather than implementing automation in the product. It is usually cheaper and easier when a product has a few customers to manage manual tasks with people power. But, when you hit growth, this can overwhelm and waste time on low-value activities, hampering innovation & speed to market.
2. Risk management: During introduction, it may be able to get away with manual risk monitoring or even none at all. The probability of fraud, cyberattacks or other incidents may be low as no one knows your product, and the money on the table is low. Depending on your product (e.g., does it handle large volumes of payments) and your customer profile (e.g., is it a B2B product) this may no longer be sufficient and risk incidents may kill a product’s growth and reputation.
3. Customer touch points: During introduction, maintaining a close touch with all customer complaints can be powerful, but during growth it can be crippling. Scaling common elements like churn management with automated solutions can reduce the load and allow product and customer teams to focus on customer touchpoints that can’t or shouldn’t be automated.
4. Technology Infrastructure: This is a time to ensure ‘tech debt’ or poor architectural decisions that risk ongoing impacts to speed to market are addressed. This does not mean addressing them all at once (though depending on the size of the issue, it may necessitate that), but instead ensuring they are given priority in planning, that high-impact initiatives are undertaken and are not always superseded by new feature work.
5. Technology Operations: It may also be important to address issues with the product development pipeline / loop (e.g., devops). This becomes especially important as product development teams grow and there are more regular contributions to the product. Again, this may not mean addressing it all at once, but ensuring adequate prioritisation against other activities.
6. People Management: Hiring people during product growth and managing larger and larger teams becomes a full-time job for product leaders. It may become important to prioritise efficiencies, outsource hiring or innovate hiring models (e.g., contracting etc) to remove some of this load and ensure continued leadership focus on product strategy and innovation.
7. Product Operating Model: It may be that all the individual components are working well by themselves, but what needs to scale is how all teams and areas of the business operate together consistently to deliver products – i.e., the Product Operating Model. There are many parts of the business that will need to work together effectively to ensure speed to market and maximum growth of the product. Without a product operating model that clearly supports these goals, products can flounder. To learn more about creating an effective product operating model, download the Brainmates e-book.

Focus Areas To Remember For The Growth Stage

By maintaining focus on the right elements, products can continue to grow almost indefinitely. By losing focus, products will be outcompeted by an influx of competitors that now see the value of the target market you are serving. The focus of the growth stage must continue to be:

1. Value Proposition Defence & Expansion: Continued investments into understanding your current customer base and identifying adjacent markets to expand into are the key to continued growth. Making the right bets on features that will expand your value proposition and defend your position in the market (build your competitive moat) becomes essential to good product management in the growth stage.
2. Addressing Debt & Scaling: Identifying and prioritising the most important areas to scale will maintain focus for product development and speed to market. This can be the difference between leading and lagging the competition.
3. Innovation to lead (not lag) the market: A clear strategic direction for innovation that ensures you are keeping at the forefront of the market will ensure that your product is not disrupted and, on the other side, that innovation investments aren’t squandered.

Maintaining ruthless focus even as the team’s scale (and more can be tackled) is essential to remaining relevant with customers and outpacing the competition in the growth stage. It makes the difference between a product that is quickly outcompeted and one that is in a state of continued growth for years or decades to come.

In the next article of our five part series, we go in depth into the maturity stage. We discuss how to best reap the returns of a mature product, how to identify new areas to kick a product back into growth and how to effectively plan for a managed product decline.